Web Travel's Margins May Be Closer to Peers — Market Talk
DDow Jones
Web Travel's disappointing margins may be closer to those of its peers than they first appear, Citi analyst Samuel Seow suggests. He points out that Europe-based Hotelbeds generates 12%-14% of its revenue from higher-margin vertical ancillaries including car rentals. Similarly, India's TBO Tek also sells sightseeing and other experiences, which Seow reckons inflates its revenue margin. Stripping out these variations, Seow thinks that the gap to Web Travel's margins is much smaller or, in the case of TBO Tek, possibly non existent. Citi keeps a buy rating on the Australia-listed travel booker but trims its target price 17% to A$5.50. Shares are at A$4.12 ahead of the open. (stuart.condie@wsj.com)